Does Social Labeling Displace Child Labor and Increase Child - PowerPoint PPT Presentation

Does Social Labeling Displace Child Labor and Increase Child Schooling? Evidence From Nepal Sayan Chakrabarty Ph.D. Fellow ZEF, University of Bonn sayan@uni-bonn.de

Outline of the Presentation � Motivation � Justification of the Study � Objectives of the Study � Methodology of Data Collection � Descriptive Statistics � Econometric Model � Results � Conclusion and Policy Implication

I. Motivation � Globalization & Incidence of Child Labor � Fair & Ethical Trade � Trade Sanctions

Trend in Earnings through the Export of Carpet (in Mil. US$), V 2004/05 V 2003/04 V 2002/03 V 2001/02 V 2000/01 V 1999/00 V 1998/99 V 1997/98 V 1996/97 V 1995/96 Year V 1994/95 V Motivation (Cont….) 1993/94 V 1992/93 V 1991/92 V 1990/91 V Nepal, 1972-2005 1989/90 V 1988/89 V 1987/88 V 1986/87 V 1985/86 0 50 200 150 100 U $ S

Volume of Carpet Exported (in ‘1000’ Square Metre) Motivation (Cont….) Nepal, 1972-2005

Motivation (Cont….) Reasons of The Carpet Shock of 1994/95 � “Panorama” TV-news of Germany transmitted the documentary on the use of child labor in Nepali carpet production in April 1994. � About 40 percent of orders were cancelled. This is one of the major reasons of the carpet shock in 1994/95.

Motivation (Cont….) Child Labor in Carpet Industry � Labor force participation rate is 21% for the age limit 5-9. � Labor force participation rate is 61% for the age limit 10-14 (NLFS, 1998-99). � 365 carpet factories within the Kathmandu Valley were surveyed, and it was estimated that about 50 percent of the total laborers were children (CWIN, 1993). � Of them, almost 8 percent were below 10 years old, 65 percent between 11 and 14, and the remaining 27 percent were between 15 and 16 years (CWIN, 1993).

Motivation (Cont….) � Trade War � Labor Standards and Enforcement in Child Labor � Social Labeling � In 1995: Rugmark; Step; Care & Fair Rehabilitation projects Monitoring Schooling

II. Justification of the Study � First empirical study targeting social labeling NGOs � Findings of this study are expected to be used by developing countries to combat child labor

III. Objectives of the study The overall objective of this study: Test luxury axiom, � nutritional efficiency wage argument. � Test social labeling program as a tool to combat child labor problem.

III. Objectives of the study (Cont....) Research Questions � Does ‘luxury axiom’ explain child labor supply in Nepal? � Is nutritional status a determining factor of ‘luxury axiom’? � Does the ‘nutritional efficiency wage argument’ hold to explain child labor supply in Nepal? � Does social labeling decrease child labor?

IV. Methodology of Data Collection � Pilot Survey (2003 -2004) � Final Survey (2004) � Key Person Interviews � Focus Group Discussions � Stratified* Random Sampling � Stratified* Random 20 households in each Sampling country 1,130 households in three countries � Local Census * Stratification: area; status of industry; type of household

V. Descriptive Statistics of Nepal Study Mean household size of 4.8 ( [4.6 ; 4.9]* ) � Mean MPC is 83% ( [81% ; 85%]* ) � estimated net savings rate is 12% ( [11% ; 14%]* ) Mean per capita income is 1,284Rs ( [1,229 ; 1,340 ]* ) � In 91 percent cases the household members joined in the first � profession while they were children (mean age is 11) The mean age of starting school is 8 years ( [7 ; 8]* ) � 32 percent of the children are working only for food � * Confidence interval 95%

Descriptive Statistics of Nepal Study (Cont…) Year Wise Distribution of Different First Profession 100% n=15 First Profession Carpet n=46 Agriculture House work 75% Others Student & vocational n=141 n=105 50% n=43 n=153 n=135 n=188 n=17 25% n=111 n=40 n=25 n=21 n=37 n=31 n=21 n=7 n=20 n=24 n=32 n=17 n=13 n=4 0% <= 1975 1976 - 1986 1987 - 1995 1996 - 1999 2000+ Year of First Profession

Descriptive Statistics of Nepal Study (Cont…) Reasons for Being Child Labor

Descriptive Statistics of Nepal Study (Cont…) Expenditure Share of Child’s Income

Descriptive Statistics of Nepal Study (Cont…) Working Hours � Almost 53 percent ( [46 ; 60]*) of the children are working up to 8 hours � Roughly 29 percent ( [23 ; 35]*) of the total child laborers working more than 8 hours and maximum 14 hours per day � Almost 18 percent of the child laborers are working more than 14 hours per day * Confidence interval 95%

Descriptive Statistics of Nepal Study (Cont…) Average Micronutrient in Food Nutrient Mean intake SD per person per day Calories (Kcal) 2,476 653 Iron per (mg) 18 12 Vitamin A (µg) 475 594 Vitamin C (mg) 44 58 Fat (gm) 31 21 Calcium (mg) 240 130 Carbohydrate (gr) 475 135 Protein (gr) 73 29

Life Expectancy and Child Labor Ho useh old w ith at 30.0% le ast o ne ch ild labor Ye s No 25.0% 20.0% Percent 15.0% 10.0% 5.0% 0.0% <= 15 1 6 - 30 31 - 45 46 - 60 61 - 75 76 + A ge of the Last Pe rs on Who Died in Hous ehold

VI. Determinants of child labor supply Model logit (Prob(Child Labor|X)) = α + Σ β i x i X 1 Labeling Status (Yes / No) X 2 Absolute Poverty (Yes / No) X 3 Sex of the Head of the Household (Male / Female) X 4 Education of the Head of the Household (Primary Education / No Education) X 5 Adult Income / Per Capita Calorie Intake X 6 Total Number of children in the Household X 7 Total Amount of Debt in the Household X 8 Age of the Head of the Household X 9 Total number of School Going Child X 10 Size of the Household

VII. Determinants of child labor supply Results (Household) 90% C.I. Lower Upper B Sig. Odds Ratio Labeling Status Yes vs. No -0.37 *** 0.48 0.30 0.77 Absolute Poverty No vs. Yes 0.82 5.10 0.93 28.18 Sex of the Head of the Household Female vs. Male -0.15 0.74 0.30 1.872 Education of the Head of the Household At least Primary Education -0.39 *** 0.46 0.27 0.786 vs. No Education Adult Income -0.78 ** 0.46 0.26 0.820 Total Number of children in the Household 1.31 *** 3.69 2.46 5.54 Total Amount of Debt in the Household 0.15 * 1.16 1.01 1.33 Age of the Head of the Household 0.22 ** 1.24 1.050 1.464 Total number of School Going Child -1.27 *** 0.28 0.204 0.389 Size of the Household -0.42 *** 0.66 0.510 0.847 Note ***, **, * stand for 1%, 5% and 10% significant level, respectively

Determinants of child labor supply Results (Child) 90% C.I. Lower Upper B Sig. Odds Ratio Child Assisted By NGO Yes vs. No -1.08 ** 0.12 0.02 0.65 Absolute Poverty No vs. Yes 0.27 1.70 0.43 6.69 Sex of the Head of the Household Female vs. Male 0.01 1.03 0.53 1.98 Education of the Head of the Household At least Primary Education -0.28 ** 0.57 0.38 0.85 vs. No Education Child Sex Female vs. Male 0.22 ** 1.55 1.11 2.18 Mother‘s Job Employed vs Housewife -0.64 ** 0.40 0.26 0.62 Mother‘s Job Expired vs Housewife 0.37 1.10 0.27 4.48 Adult Income -0.44 * 0.64 0.42 0.97 Total Number of children in the Household 0.28 * 1.33 1.03 1.70 Total Amount of Debt in the Household 0.08 * 1.08 1.00 1.17 Age of the Head of the Household 0.09 1.09 0.98 1.21 Total number of School Going Child -0.87 *** 0.41 0.34 0.51 Size of the Household -0.33 *** 0.72 0.60 0.87

Determinants of child labor supply Results (Household) 90% C.I. Lower Upper B Sig. Odds Ratio Labeling Status Yes vs. No -0.44 *** 0.42 0.33 0.53 Absolute Poverty No vs. Yes 0.02 1.04 0. 48 2.27 Sex of the Head of the Household Female vs. Male -0.20 0.66 0.40 1.08 Education of the Head of the Household At least Primary Education -0.41 *** 0.44 0.34 0.57 vs. No Education Per Capita Calorie Intake 0.68 *** 1.98 1.60 2.31 Total Number of children in the Household 1.67 *** 5.32 4.38 6.46 Total Amount of Debt in the Household 0.17 *** 1.18 1.11 1.26 Age of the Head of the Household 0.23 *** 1.26 1.16 1.37 Total number of School Going Child -1.10 *** 0.30 0.26 0.36 Size of the Household -0.66 *** 052 0.46 0.58 Is Calorie Above Subsistence Yes (above subsistence) vs. No -0.67 *** 0.26 0.177 0.386 (below subsistence) Note ***, **, * stand for 1%, 5% and 10% significant level, respectively

Determinants of child labor supply (above subsistence with other micronutrients ) Results (Cont…) 90% C.I. Lower Upper B Sig. Odds Ratio Labeling Status Yes vs. No -0.37 ** 0.47 0.26 0.86 Absolute Poverty No vs. Yes -0.14 0.76 0.1 6 3.66 Sex of the Head of the Household Female vs. Male 0.05 1.13 0.30 4.27 Education of the Head of the Household At least Primary Education -0.47 ** 0.39 0.19 0.79 vs. No Education Per Capita Calorie Intake 0.37 1.45 0.98 2.14 Total Number of children in the Household 1.65 *** 5.22 3.19 8.56 Total Amount of Debt in the Household 0.17 1.18 0.93 1.52 Age of the Head of the Household 0.11 1.12 0.91 1.37 Total number of School Going Child -1.39 *** 0.25 0.16 0.38 Size of the Household -0.71 *** 049 0.36 0.68 Iron -0.01 0.98 0.96 1.01 Fat -0.01 * 0.98 0.97 0.99 Vitamin A -9.05 1.00 1.00 1.00 Note ***, **, * stand for 1%, 5% and 10% significant level, respectively